This
appeal is directed against the final judgment and order dated 6.5.2003 passed
by the High Court of Punjab & Haryana at Chandigarh in F.A.O. No.1587 of 2002. The appellant before us is the
owner of the vehicle, a truck. The respondent is the insurer of the vehicle.
The vehicle met with an accident on 11.10.1998. The claim petition was filed by
the claimants before the Tribunal. Accepting their claim, the Tribunal awarded
compensation of Rs.2.70 lakhs along with interest.

The
Tribunal held that the accident took place due to rash and negligent driving of
the driver Mam Chand and that the appellant-owner had not committed any breach
of the terms and condition of the insurance policy and that the Insurance
Company is liable to make the payment of compensation amount to the claimants
as insurer of the truck.

The
Insurance Company, being aggrieved with the award passed by the Tribunal, filed
an appeal before the High Court. The High Court modified the order passed by
the Tribunal and directed that the Insurance Company would be entitled to
recover the amount from the owner of the offending truck as per the law laid
down by this Court in Kamla's case, reported in 2001 (4) SCC 342. The High
Court also held that the appellant has contravened the terms and conditions of
the insurance policy as the licence was not issued by the Licensing Authority, Hyderabad. The Insurance Company filed
application under section 174 of Motors Vehicle Act for recovery of amount of
Rs.3,27,890/- paid as compensation to the claimants by the Insurance Company.
The appellant herein filed the reply to the application in which he averred
that the application for recovery of compensation paid to the claimants by the
Insurance Company is not maintainable as the rights of the parties have not
been determined by the civil court. The Tribunal held that the Insurance
Company is entitled to recover the money from the petitioner through the
execution application and ordered to issue a certificate of recovery of amount
of Rs.3,27,890/- under section 174 of Motor Vehicles Act and the same be sent
to the District Collector.

Aggrieved
against the order passed by the High Court, the appellant has preferred the
above appeal in this Court. The above appeal was filed with a delay of 339
days. This Court issued notice on the special leave petition as well as on the
application for condonation of delay. After notice, the respondent Insurance
Company has also filed a counter affidavit and the matter was listed today for
final hearing. At this stage no purpose would be served to dismiss the civil
appeal on the ground of delay in filing the appeal. Since the notice was
ordered on special leave petition and on the delay and the counter affidavit
has already been filed, we condone the delay and heard the learned counsel appearing
on either side, on merits of the rival claims.

Mr. Mahabir
Singh, learned Senior Counsel appearing for the appellant submitted that the
High Court has not noticed the finding of the Tribunal, which is based on
evidence, and that the Tribunal had recorded the evidence and had given its
award after examining the evidence on record and the material facts, and
therefore, the said considered order should not have been set aside by the High
Court. He would further submit that the owner of the vehicle has taken adequate
care and caution to verify the genuineness of the licence held by the driver.
The Insurance Company also did not lead any evidence to show that due and
adequate care was not taken by the owner. He would further submit that the High
Court has failed to appreciate that there was no evidence that the appellant,
who had employed the driver, had knowledge that the driver was not holding a
valid driving licence. Our attention was also drawn to the evidence tendered.
The appellant was examined as RW/1. He deposed that he was the owner of the
truck in question and that he had employed Mam Chand as driver of this truck in
August, 1998 and had checked his driving licence. He would further depose that
he had also taken his driving test and satisfied that the driver was fully
competent and conversant to the driving. It is further stated that the driver
would not have been employed if he had no driving licence. In the
cross-examination, nothing has been elicited from the appellant to discredit
his testimony as RW/1.

Mr.
M.K. Dua, learned counsel appearing for the respondent-Insurance Company
submitted that the appellant has no case on merits as the order of the High
Court is well supported by the law laid down by this Court in the case of New
India Assurance Co. Ltd. versus Kamla & Ors., etc., reported in 2004(4)SCC
342. He would further submit that the licence issued to the driver was found to
be fake and the High Court gave categorical finding that the driver was not
holding a valid driving licence and that the appellant committed breach of
terms and conditions of the insurance policy. He, therefore, submitted that the
order passed by the High Court is not liable to be interfered with.

We
have perused the pleadings and the orders passed by the Tribunal and also of
the High Court and the annexures filed along with the appeal. This Court in the
case of United India Insurance Co. Ltd. versus Lehru & ors., reported in
2003 (3) SCC 338, in paragraph 20 has observed that where the owner has
satisfied himself that the driver has a licence and is driving competently
there would be no breach of Section 149(2)(a)(ii). He will, therefore, have to
check whether the driver has a driving licence and if the driver produces a
driving licence, which on the face of it looks genuine, the owner is not
expected to find out whether the licence has in fact been issued by a competent
authority or not. The owner would then take test of the driver, and if he finds
that the driver is competent to drive the vehicle, he will hire the driver.

In the
instant case, the owner has not only seen and examined the driving licence
produced by the driver but also took the test of the driving of the driver and
found that the driver was competent to drive the vehicle and thereafter
appointed him as driver of the vehicle in question. Thus, the owner has
satisfied himself that the driver has a licence and is driving competently,
there would be no breach of Section 149(2)(a)(ii) and the Insurance Company
would not then be absloved of its liability.

Another
decision rendered by a three Judges Bench of this Court in the case of National
Insurance Co. Ltd. versus Swaran Singh & Ors, reported in 2004 (3) SCC 297,
can also be usefully referred to in the present context. This Court in para 110
of this judgment gave the summary of their findings to the various issues as
raised in those petitions. We are concerned only with sub para (iii) of
paragraph 110. The said sub para (iii) reads thus:

".....................................

The breach of
policy condition e.g. Disqualification of the driver or invalid driving licence
of the driver, as contained in sub- section (1)(a)(ii) of Section 149, has to
be proved to have been committed by the insured for avoiding liability by the
insurer. Mere absence, fake or invalid driving licence or disqualification of
the driver for driving at the relevant time, are not in themselves defences
available to the insurer against either the insured or the third parties. To
avoid its liability towards the insured, the insurer has to prove that the
insured was guilty of negligence and failed to exercise reasonable care in the
matter of fulfilling the condition of the policy regarding use of vehicles by a
duly licensed driver or one who was not disqualified to drive at the relevant
time." As observed in the above paragraph, the insurer, namely the
Insurance Company, has to prove that the insured, namely the owner of the
vehicle, was guilty of negligence and failed to exercise reasonable care in the
matter of fulfilling the condition of the policy regarding use of vehicles by a
duly licensed driver or one who was not disqualified to drive at the relevant
point of time.

We
respectfully agree and following the above ruling, we allow the appeal filed by
the owner of the vehicle and absolve him from any liability as ordered by the
High Court. It is now brought to our notice that the entire compensation has
already been deposited and the same has been withdrawn by the claimants. No
other point has been urged by both sides.